Apple Pulls Controversial Proxy Proposal After Court Ruling

Apple has withdrawn from its proxy statement a controversial proposal it had intended to place before shareholders that had drawn the ire, and a lawsuit, from hedge fund manager David Einhorn of Greenlight Capital.

Just moments ago, Apple issued a statement essentially saying it will comply with the ruling of Manhattan federal judge Richard Sullivan issued earlier today saying the proposal improperly bundled too many terms together into one.

Here’s Apple’s statement in full:

“We are disappointed with the court’s ruling. Proposal #2 is part of our efforts to further enhance corporate governance and serve our shareholders’ best interests. Unfortunately, due to today’s decision, shareholders will not be able to vote on Proposal #2 at our annual meeting next week.”

Einhorn triggered a kerfuffle with Apple a few weeks ago saying the proposal — number two on Apple’s proxy — removed the possibility of perpetual preferred shares from Apple’s corporate charter. He argued such preferred shares — he calls them iPrefs — would be a great way for Apple to distribute more of its massive hoard of cash ($137 billion at last count) to shareholders, beyond the existing dividend. He sued Apple, arguing it wasn’t properly following SEC rules with the proposal, and the judge agreed. Apple CEO Tim Cook had called the lawsuit “bizarre.”

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